WRU

"What will the money be spent on in Wales?

The WRU plan is to invest the money in long term projects which will pay regular dividends in the future.

We’ve already seen this strategy in action with the Westgate Hotel development.

That involves the old post office building on Westgate Street, next to the Principality Stadium, being converted into a hotel, with an opening pencilled in for this autumn.

The idea behind that WRU project is to make an initial capital investment to generate revenue on an annual basis.

So it seems we can expect to see more schemes of that nature.

One example would be the proposed roof walk visitor attraction, which would enable people to walk on top of the roof of the Principality Stadium, taking in panoramic views of Cardiff.

The WRU has also dipped a toe in the brewing market with the launch of its own beer and that might be a sign of things to come in terms of an area for further investment.

There has obviously been a major shortfall in income as a result of the Covid-19 pandemic.

But it's pretty clear the CVC money will not be used by the WRU to plug that gap in the short-term, with generating future income being their firm focus.

In essence, the Union approach could best be summed up as looking at tomorrow rather than today.

For them, it's all about long-term sustainability.

Now, inevitably, questions will be raised over the financial plight of Wales’ four pro teams and whether a portion of the CVC money should not be used to address their immediate issues.

The regions have had their payments from the WRU slashed from £26m to £3m due to the pandemic.

A £20m bank loan has been taken out with NatWest to keep the pro game afloat, but that will have to be paid back by the four teams.

Fans of the regions will be far from happy if all the CVC money goes towards more hotel-style projects when the sides they support are facing such a financial burden.

However, it does seem as though the Union’s focus will be on the long-term rather than any short-term fix.

There are moves to renegotiate the terms of the £20m bank loan, so that it will be paid back over a longer term and with reduced interest.

But it will still be the regions paying it back and it's pretty clear that none of the £51m CVC money will be making its way to them in the short-term.

Instead the focus will be on the WRU using the money they are to receive over the next five years to generate long-term income for the Welsh game.

In essence, it's a case of them focusing on equity rather than debt and on new streams of future revenue.

On that front, there is one comment in the Union's press release on the deal that really catches the eye. It comes from chairman Rob Butcher.

He says: “If the recent challenges faced across the sporting landscape teach us anything, it is that diversifying our income beyond the traditional stadium income model is vital.”

That gives a pretty clear clue of the direction of travel we can expect to see - projects that will “make this money work hard for Welsh rugby in the long term”, to again use Butcher’s words."

When any of the dividends from this 'diversification' will ever get to improve the Regions is anybody's guess. Great isn't it...